Being one of the biggest DRAM and NAND manufacturers in the market, Micron have chugged along steadily, with the rise of smartphones and tablets helping offset the losses on the PC side. This is set to change very soon though with them forecasting a loss in the current quarter (Q4 2015), the first in a long while. The loss comes due to the naturally weak first quarter of the year, increased investments, pricing pressure and low demand.
Overall, they are expecting to lose between $50 to $120 million, or about 5-12 cents per share. This comes as revenues are expected to fall about $200 million short of analysts expectations. This comes after the company have made a number of acquisitions including Tidal Systems for their SSD controller and Inotera for their DRAM business. Micron is also investing heavily into TLC NAND, 3D XPoint and 3D NAND so it’s not as bad as it first may seem as the investments will hamper their fiscal results, but ultimately should pay off if the investments go as expected.
Coupled with the expected low PC demand, they are also facing heavy pricing pressure from competitors that has led huge price drops for both SSDs and DDR4 over the past few months. This is great news for consumers making DDR4 based systems much more affordable and open to a mini price-war involving Micron and their competitors. With increasing expenses in a time of falling revenues, it’s not surprising that Micron is facing some immediate trouble. The incoming investments though should help bump Micron back into the black soon enough and we will be monitoring this story closely as it develops in the near future.
Do you own any Micron products yourself? The company portfolio includes Crucial for consumer based memory and storage, Micron themselves for enterprise and business class products and Lexar Media who manufacturer flash memory for cameras and recording equipment.